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The account would be linked with the Aadhar number
of the account holder and would become the single point
of receipt of all Direct Benefit Transfers (DBT) from
the central government/state government/local bodies.
There would be convergence with the efforts of UIDAI
to enroll beneficiaries for Aadhar number during account
opening.
Overdraft of upto Rs. 5000 would be provided to the
customers after six months of satisfactory performance of
savings/credit history. When all households in a district
are covered, the District Magistrate will issue a certificate
declaring the district 100 per cent covered.
As part of the implementation, dormant accounts
would be reactivated and mobile banking encouraged for
low-end phones, with the Mobile Wallet being used to
deepen financial inclusion.
3. Financial Literacy and Credit Counseling
As per RBI, 718 financial literacy centres (FLCs) have
been set up by March 2013. However, most FLCs have
not been set up in rural areas. Though India is amongst
the world’s most efficient financial markets in terms of
technology, regulation and systems, financial literacy
is most important in view of the low levels of literacy
and the large section of the population being out of the
formal financial system. Various regulators are expected
to support the case of financial literacy and inclusion in
collaboration through the National Centre for Financial
Education (NCFE). JLGs and SHGs would assist in the
financial literacy dissemination and NABARD will be
responsible for the monitoring of the financial literacy
campaign for these agencies. The plan aims to expand the
FLCCs to the block level.
4. Credit Guarantee Fund
The fourth pillar of the PMJDY plan is the creation of
a Credit Guarantee Fund, proposed to be housed in the
National Credit Guarantee Corporation (NCGC). As
per RBI estimates, upto March 2014, only 5.90 million
basic banking accounts out of 242 million availed
overdraft facility of Rs. 16 billion. With the provision
of credit upto Rs. 5,000 as overdraft after six months,
the fund aims to provide guarantee against overdrafts.
Out of about 250 million households with basic banking
accounts after the implementation of the Mission plan,
there are expected to be 120 million KCC holders and
130 million other card-holders. Assuming two-thirds of
the latter households avail overdraft, the amount will be
Rs. 430 billion. To service this, an initial corpus of Rs. 10
billion would be funded by the Financial Inclusion Fund,
bring maintained by NABARD.
5. Micro-Insurance
The fifth pillar of this plan is to provide micro-insurance
to the people. A micro insurance policy can be a general
or life insurance policy with a sum assured of Rs. 50,000
or less. The Bank Mitr (BCmechanism) would be enabled
to offer micro-insurance products and full coverage of
schemes like Aam Admi Bima Yojana. The estimated
target is of 46 million families covered under the Aam
Admi Bima Yojana, out of 120 million families.
6. Unorganised Sector Pension Scheme
(Swavalamban)
The Swavalamban scheme was launched by Government
of India in October 2010 to address the old age income
protection need of the hitherto unaddressed organized/
informal sector workers, comprisingmore than 85 per cent
of the working population and numbering almost 400
million, including 120 million women. The Government
of India contributes Rs. 1,000 per annum for a stipulated
period when the subscriber deposits a minimum of Rs.
1,000 to a maximum of Rs. 12,000 per annum. The
total number of unique subscribers to the scheme has
crossed 2.7 million and 1.6 million subscribers received
Swavalamban co-contribution during FY 2013–14. A
number of state government entities in several states
have adopted the scheme and are making additional
co-contributions to the Swavalamban accounts of the
beneficiaries. It is intended that the Bank Mitr would be
used to expand the coverage of the Swavalamban scheme
to reach an estimated 350 million unorganized labour in
the country.
7. Role of Technology in Financial Inclusion
According to the Mission document, the main hurdle in
financial inclusion so far has been the large numbers to be
